Kyle Samani: PropAMM is one of the most important innovations in market microstructure in decades

Odaily News Kyle Samani posted on the X platform, stating that PropAMM is one of the most important innovations in market microstructure in recent years, and perhaps even one of the most significant innovations in decades.

Samani explained that in traditional CEXs, there are small but real latency differences between different market makers. Even just a few microseconds can be enough to determine who updates their quotes first and who gets the trade executed first. Therefore, in traditional markets, market makers need to invest significant resources to optimize physical co-location, fiber optics, network equipment, and hardware, all to gain an advantage in microsecond-level competition. The beauty of propAMM lies in the fact that the blockchain itself directly "hosts" the market maker algorithm. The latency required for a market maker to update prices only involves electrons moving within the same physical silicon chip. If the last market order causes a change in the SOL-USD price, this information becomes immediately visible to all propAMMs and is used for pricing the next market order. Everything happens within the same silicon chip; there is no longer a need for two-way communication between servers.